Notes to the combined and consolidated financial statements - Mondi

Notes to the combined and
consolidated financial statements continued
for the year ended 31 December 2009
18 Trade and other receivables
E million 2009 2008
Trade receivables (a) 824 941
Allowance for doubtful debts (b) (61) (50)
Net trade receivables 763 891
Other receivables 152 197
Prepayments and accrued income 18 16
Total trade and other receivables 1 933 1,104
Note:
1
Includes non-current trade and other receivables of Enil (2008: E4 million).
The fair values of trade and other receivables are not materially different to the carrying values presented.
(a) Trade receivables: credit risk
The Group’s exposure to the credit risk inherent in its trade receivables and the associated risk management techniques that the
Group deploys in order to mitigate this risk are discussed in note 38. Credit periods offered to customers vary according to the
credit risk profiles of, and invoicing conventions established by participants operating in, the various markets in which the Group
operates. Interest is charged at appropriate market rates on balances which are considered overdue in the relevant market.
To the extent that recoverable amounts are estimated to be less than their associated carrying values, impairment charges have
been recorded in the combined and consolidated income statement and the carrying values have been written down to their
recoverable amounts. The total gross carrying value of these impaired trade receivables as at the reporting date is E73 million
(2008: E71 million) and the associated aggregate impairment is E61 million (2008: E50 million).
Included within the Group’s aggregate trade receivables balance are specific debtor balances with customers totalling E95 million
(2008: E87 million) which are past due but not impaired as at the reporting date. The Group has assessed these balances for
recoverability and believes that their credit quality remains intact. An ageing analysis of these past due trade receivables is provided
as follows:
124 Annual report and accounts 2009 Mondi Group
Trade receivables past due by
Less than More than
E million 1 month 1-2 months 2-3 months 3 months Total
Carrying value at 31 December 2009 59 16 7 13 95
Carrying value at 31 December 2008 57 15 6 9 87
Included within the Group’s aggregate trade receivables balances are debtor balances with customers totalling E6 million
(2008: E8 million) where contractual terms have been renegotiated to extend the credit period offered. The Group believes that
these balances are fully recoverable and therefore no impairment loss has been recognised.
The Group has entered into certain debt factoring arrangements in which the financial counterparties retain recourse in the event
of debtor default. Accordingly, the Group continues to recognise the underlying trade receivables transferred until cash settlement
occurs. A concurrent financing liability is also recognised in respect of the obligation to transfer economic benefit to financial
counterparties. At the reporting date, trade receivables with a value of E3 million (2008: E1 million) are subject to such factoring
arrangements and an associated financial liability of E1 million (2008: E1 million) has been recognised.